Chapter 1
Introduction to Disability Income Insurance


The important points addressed in this lesson are:

The chances of an individual becoming disabled are more likely at most ages than his or her chance of death

The principal factors that affect the probability of becoming disabled include the insured's health status, age, occupation and lifestyle

The likelihood of a disability occurring in a group of individuals is much greater than the probability of any individual's become disabled

The sources available to provide an income during an individual's disability are generally limited to savings, a spouse's employment, borrowing or disability income insurance

Although the general level of savings in the United States is far less, if an individual saved 10% of income each year, one year of disability would wipe out almost 10 years of savings

Spousal employment is not usually a viable source of sufficient family income during a period of disability for several reasons, including the likelihood that both spouses are employed just to meet existing expenses

A spouse that is not currently employed outside the home is unlikely to be a source of sufficient income in the event of the other spouse's disability due to technological advances that may have rendered his or her skills obsolete

Disability income insurance is the most economical and desirable form of income replacement during disability since the annual cost of each dollar of benefit is normally no more than 4 - 5¢




Likelihood of Disability
Sources of Disability Income
Chapter 1 Review